Pursuant to a congressional request, GAO reviewed the legislative changes to the Food Stamp Program mandated by the 1996 welfare reform act; focusing on, for fiscal year (FY) 1995, the: (1) characteristics of households whose food stamp benefits were limited because of the cap on their deduction for excess shelter expenses; and (2) extent to which food stamp benefits would have been higher for these households if there had not been a cap.

GAO noted that: (1) in FY 1995, households whose food stamp benefits were limited because of the cap on the deduction for excess shelter expenses differed in several key respects from households not affected by this cap; (2) nearly all households affected by the cap had children, while only slightly more than half of households not affected by the cap had children; (3) moreover, households affected by the cap were more likely to: (a) be headed by asingle female; (b) have noncitizen members; (c) have earned income; and (d) live in urban areas; (4) affected households also typically had more household members and received more in food stamp benefits than those not affected by the cap; (5) households affected by the cap tended to be located in the Northeast and West, while households not affected by the cap tended to be located in the South; (6) in the absence of the cap on the excess shelter expenses deduction in FY 1995, the average monthly food stamp benefit for affected households would have been about 12 percent, or $31, higher; (7) total federal food stamp expenditures would have increased by 1.9 percent, for a total of $417 million in FY 1995; (8) the largest increase would have been for households in the Northeast, where average shelter costs are the highest; (9) nationwide, households in urban areas would have received larger increases than those in rural areas; and (10) households in New York and California would have received almost half of these additional benefits.